Interim Terry College of Business dean Santanu Chatterjee told business leaders that Georgia’s economic growth will be slower in 2026 as a result of “uncertainty” around trade policies, slowing population growth, labor force declines, and slower national economic growth. Maya Homan/Georgia Recorder
Economists are offering a “sobering” forecast for 2026, marking the second consecutive year of slowed growth across both Georgia and the U.S. at large. The state’s economy is projected to grow 1.5% in 2026, only marginally better than the 1.3% growth expected nationally, according to economists at the University of Georgia.
During a 2026 Georgia Economic Outlook presentation in downtown Atlanta Wednesday, interim Terry College of Business dean Santanu Chatterjee told business leaders that Georgia’s economy grew by roughly 3% in 2025. But heading into 2026, he said, growth will be slower as a result of “uncertainty” around trade policies, slowing population growth, labor force declines, and slower national economic growth.
Unemployment is also expected to be on the rise, with Georgia’s rates estimated to climb to 4.1%, an increase of half a percentage point. National unemployment is expected to sit at 4.7%, up from the current 4.4%. Inflation is expected to hover around 3.5%, up from 3% in September.
As with last year’s prediction, Georgia is expected to have a stronger economy than the U.S. as a whole, but the state’s economy is still predicted to struggle. Nationally, the U.S. faces a 49% risk of recession.
Georgia has a few protective factors that make its economy more resilient than the U.S. as a whole, Chatterjee said. Existing economic development projects from companies like EnergyTek Corporation, TriNet and JS Link America will continue to ramp up production.
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Additionally, the state’s numerous military bases and the cities around them will likely benefit from increased federal spending on defense and immigration enforcement. An expanded immigrant detention facility near Folkston, Georgia — which is expected to be the nation’s largest — is also projected to create 400 new jobs in the area.
Data centers are also expected to be a major source of growth in the upcoming year. According to one report, Georgia recently surpassed Virginia as the most active data center market in the nation.
Federal policies begin to make an impact
Though Georgia is expected to have a slightly brighter economic outlook than the U.S. at large, national trends around wage growth and consumer spending indicate that the country is experiencing a “K-shaped economy” where high earners see their wealth and income rise, while lower earners struggle to keep pace with the rising cost of living.
“Across the board, lower income households appear to be significantly more challenged right now than the rest of the economy,” said Mark Mathews, the executive director of research at the National Retail Federation, who delivered the national economic forecast at Wednesday’s event.
As President Donald Trump wraps up the first year of his second term, his policies on tariffs and immigration are also beginning to make their impact on the national economy.
Tariffs on imports are expected to settle at around 15% in 2026, which is six times higher than the rate at the beginning of 2025. The rate is not high enough to trigger a recession by itself, Chatterjee said, but elevated global tensions and economic uncertainty could slow growth.
Some companies may also choose to postpone hiring and other business decisions “until trade policies stabilize and become more predictable.”
Trump’s immigration policies could also lead to changes in the economy. Normally, immigrants help contribute to annual population growth, Mathews said. But under policies that have ramped up immigration enforcement and placed a new emphasis on “self-deportation,” 2026 “could well be the first year in American history where we have a population decline,” he said.
